Vedanta expects a double-digit growth in India despite slowdown
Bharat Goenka, CFO - Aluminium and Power, Vedanta, in an interview with CNBC-TV18, said despite the slowdown, there is hope that with monsoon behind us, the festive season ahead and the government’s $100 billion infrastructure thrust, the company would be "back on track to register a strong double-digit growth in India."
He said high taxation around the power sector is the biggest challenge as power is the biggest component of aluminium industry.
“The tax which is imposed on the power industry, especially if you are making your own power, is close to $450 per tonne, which is around 20 percent of the costs. While if you import aluminium into India, you only pay 7.5 percent import duty but if you manufacture aluminium in India, you end up paying close to 20 percent duty. So there is an inverted duty structure in the aluminium industry and that remains the key challenge in India,” he said.
He further said that the implementation of renewable purchase obligation (RPO) has been very patchy and a lot of states are not following the notification of the power ministry. He urged the ministry to pass clear guidelines for the RPO to all the states to implement it.
Ministry of Power, in February 2019, had issued a circular that for captive power plants the renewal power obligation should be capped at the date of commission and not increase year on year, he added.
Talking about the coal situation, he said the first quarter saw a significant improvement in the supply of coal. However, in monsoon, the coal production has come down and supply to the industry has curtailed. While the supply of coal to independent power plants continues, the industry is suffering a lot. “So we call on the government to do an equal allocation of coal reserves and not curtain supplies to the industry."
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